from the undoing-the-damage dept

Urmann+Colleagues (U+C) is having a hell of a month. It looked to be briefly on the path to the sort of financial success copyright trolls like Prenda and Mailbu Media can only dream about. U+C sent out at least 10,000 settlement letters earlier this month asking for €250 ($344) from viewers who had streamed certain pornographic titles on RedTube.

The problems inherent in U+C's "business model" swiftly became apparent. First off, it appeared the agency had misled a German court by presenting RedTube as a file-sharing site, rather than a streaming site. In addition, U+C had somehow acquired subscriber info and IP addresses, data not easily obtained from the streaming sites. (RedTube has denied multiple times that it provided this info to U+C). German lawyers stepped up and informed the public that the demand letters were problematic to say the least and that there was little chance the demands were enforceable under German law (thanks to streaming of infringing content not being illegal).

Now it's not just lawyers standing in the way of U+C's easy money. The court has stepped in, admitting its mistake in approving U+C's requests and revoking court orders compelling Deutsche Telekom to hand over subscriber info on nearly 50,000 IP addresses.

According to German tech site heise.de, these harvested IP addresses can be acquired for a certain amount of cash. Ars Technica was unable to secure a comment from TrafficHolder, despite its website's promise of "round the clock customer service." TrafficHolder also failed to respond to emailed queries.

This development gives U+C's efforts the appearance of a small-time honeypot, something that could generate further legal problems for the company. But as German lawyer Christian Solmecke points out, attempting to recover fines or costs from U+C (and its benefactor, The Archive AG) would be a long, drawn-out process that could last as long as 18 months. For most of those targeted by U+C's shady tactics, simply not paying a $344 fine will be victory enough.

The Archive AG (supposedly the rights holder for the porn titles in question) hasn't completely dodged the fallout from this ham-fisted collection attempt. RedTube has been granted an injunction against the company that prevents it from hassling its viewers about alleged copyright infringement. From the press release:

The District Court of Hamburg has granted an injunction in reaction to Cease and Desist letters sent to RedTube users by law firm Urmann Collegen on behalf of the Archive AG. RedTube, the leading provider of adult content filed an injunction earlier this week to prevent further harassing RedTube users with threatening Cease and Desist letters and alleging copyright infringement.

As ruled by the court, The Archive AG is no longer allowed to send out warning letters to Redtube users claiming that the users violated the copyright of The Archive AG -- not only with regard to the videos mentioned by Urmann Collegen in the warning letters, but in regards to any specific videos. The claims by the Archive AG have been deemed unfounded and users of streaming websites, including RedTube, are once again free to access and enjoy videos with peace of mind.

RedTube again reiterated its claim that it never exposed any user data, nor did it turn over any info to U+C or The Archive AG, either of its own free will or via a court order.

U+C isn't shy about using shady tactics to boost collections. As has been covered here in the past, U+C has attempted to shame file sharers into paying fees by threatening to expose their porn habits to the public. This latest attempt is just as legally questionable. Of course, nothing happening now will mean a thing if, in the future, U+C is able to deploy nefarious tactics with the blessing of the confused German court.

from the barely-legal-trolls-stripped-bare-and-humiliated! dept

German copyright troll U+C (Urmann and Colleagues) recently upped its trolling game by sending out settlement letters to German Redtube viewers who had the misfortune of watching some rather generically-titled porn under its nominal control. U+C's previous trolling efforts had concentrated on P2P file sharing, so this new move, targeted at viewers of supposedly infringing streams raised several questions.

First and foremost: how did U+C acquire the names and addresses of those who had viewed the streams? Streaming viewers don't leave IP addresses exposed like P2P sharers do. Redtube denied turning over any user data. The theory arose that U+C had misled the courts by presenting Youtube as a "swap meet," i.e., a file sharing site. Obviously, Redtube is not in the business of file sharing and under German law, those viewing streams -- even if the streams themselves are infringing -- cannot be held liable for infringement. The other theory mooted was that U+C was utilizing some sort of malware to trap IP addresses, but no evidence has surfaced that this is the case. (Although, it should be pointed out that Google indicates Redtube "might be hacked.")

A few German lawyers stepped into the fray, offering their assistance and telling those served with letters to ignore them until further notice. Now, Redtube itself has weighed in on the matter via a press release, and it sounds thoroughly irritated by U+C's shady activities.

RedTube, the leading provider of adult content with 25 million daily users, refutes the matter in which thousands of RedTube users have received so-called "cease and desist letters". RedTube stands by its firm opinion that these letters are completely unfounded and that they violate the rights of those who received it in a very serious manner.

RedTube reaffirms its position that the Company takes all its customers personal data very seriously and applies the highest privacy standards for its visitors on an on-going basis.

The Company goes on to emphasize that RedTube certainly did not submit any personal data to any law firm or any authority or entity, and that it seems very likely that the data was obtained by using dishonest measures.

"Serious allegations have surfaced in the media recently," stated Vice President Alex Taylor, "rest assured that our counsel received an immediate mandate to pursue all necessary actions to make all related entities accountable for the damage that has been caused." Taylor continued, "In 2013, blackmailing and violating the privacy of German citizens' private domain should not and will not be tolerated."

Redtube would like to reach out to its viewers who have received one of the spamming letters, and ask they get in touch with Redtube immediately. If you have received one of these letters, please let us know by contacting us at media@redtube.com.

So, Redtube's got your back, Einhänders. It remains to be seen what the court U+C misled will do once this information makes its way back to it. It may have very little effect on what's already been done, but it will (hopefully) guide its interactions with U+C in the future. In the meantime, those who have been sent letters asking them to pay up are probably safe just running them through the shredder. There doesn't seem to be any German law under which U+C can hold viewers accountable for streaming allegedly infringing material.

from the competing-isn't-undermining dept

We've joked in the past about how many of the complaints we see from companies about new, more innovative competitors, is that they somehow represent "felony interference of a business model." Some companies, it seems, like to believe that if they have a successful business model, any new competitor that changes the market around must be doing so illegally. Eric Goldman points us to just such a lawsuit in California, where the proprietor of a subscription based porn website sued RedTube, one of many, many porn-focused free streaming video sites, and many of RedTube's advertisers, arguing unfair competition. Basically, the argument was that by setting up a website and offering these porn videos for free, while making money on the advertising, RedTube was effectively "dumping" its product on the market below cost in order to harm the market and make money elsewhere.

RedTube, in response, filed an anti-SLAPP claim, saying that the lawsuit sought to silence RedTube exercising its First Amendment rights of speech. While a lower court mostly agreed, it did leave open one small piece of the unfair competition claim, related to the issue of the claim that someone at RedTube's parent company signed up for the plaintiff's subscription website, downloaded the videos, and posted them on RedTube. However, the California state appeals court rejects the lower court's argument, and agrees that even this claim should be tossed out, because it's only unfair competition if the plaintiff can show that he has, in fact, lost money or property as a result of the unfair competition. Since the plaintiff was unable to do so, the court ruled that this claim got tossed out too (though, if true, you do wonder if there might be a copyright issue -- which does not appear to have been raised here).

On the overall point of underpricing the market unfairly, the court points out how silly this is, noting that giving away free content in exchange for advertising is a business model that's been around for ages, and is hardly a form of unfair competition:

If Bright's business model sounds familiar it's because it's the business model
typical of broadcast radio and television stations in the United States not to mention
thousands of local newspapers and, more recently, tens of thousands of Internet websites
including Youtube, CNN and Video.Yahoo.

The court also points out, in its opening, that business models change, and companies need to keep up -- and they shouldn't expect the law to keep their old business models in place:

In the 21st century, businesses of all kinds are having to adapt to a constantly
changing commercial landscape. The business that the parties describe as the "adult
entertainment" industry is no exception. Websites that originally made their money by
offering such material on a subscription or pay-per-view basis are being replaced by
"tube" websites which offer their content for free and make their money through
advertising.

There's also an interesting discussion over whether or not RedTube qualifies for SLAPP protections, as the site's content must involve the "furtherance of their right of free speech on a public issue." The plaintiff said that his complaint had nothing to do with stopping speech, but from the "anti-competitive conduct." The court notes that even publishing videos of porn online is conduct in the furtherance of speech and, in fact, that there is a "substantial public interest in the kind of sexually explicit videos shown on tube-sites such as Redtube." That's one way to put it.

The final point that seemed worth discussing on this is just how silly some "anti-competitive" behavior laws and rulings can be. Part of the plaintiff's argument here was to bring up a bit of caselaw involving two competing San Fransisco tourist cruises, where one firm got in trouble for selling tickets below cost, even though the firm made it up elsewhere. The court rejects this, by claiming that the earlier ruling doesn't apply here because RedTube "does not sell two separate products." That seems silly to me, and if anything really just highlights the problem with the original court ruling about using the tickets as a loss leader. If you read the ruling this way, you get a nonsensical result: giving away the videos for free would be legal, but charging a penny for them could suddenly be seen as unfair competition, because now it would be "selling" two separate products. Bundling multiple products, such that some are given away free or cheaply in the interest of a larger business model should never be seen as anti-competitive on its own. While I agree with the outcome, it seemed like this was the most confused part of the court's ruling, in that it tapdanced around what was, basically, a really bad ruling. The real issue should be to get rid of any rule that says such kinds of bundles are against the law in the first place.